Mylan receives backing for Perrigo purchase from largest shareholder Abbott

Abbott said Tuesday that it intends to vote its 14.5-percent stake in Mylan in favour of the latter's already twice rejected bid to acquire Perrigo, lending support to Mylan as it tries to avoid being bought out by Teva. Abbott CEO Miles White remarked that "Mylan's standalone strategy and acquisition of Perrigo will further enhance its platform, is strategically compelling, value enhancing for shareholders, and offers a clear path to completion."

Commenting on the backing of its largest shareholder, Mylan executive chairman Robert Coury said his company was "grateful" for Abbott's support. He added that "when we acquired Abbott's non-US developed markets specialty and branded generics business earlier this year, we gained an important stakeholder…which understands the powerful potential of our platform, and the critical importance of our scale and breadth across our distribution channels." However, Abbott moved to reduce its holding in Mylan by about a third after the branded-generics transaction closed in February.

Mylan made a formal offer to acquire Perrigo in April for roughly $33 billion, consisting of $60 in cash and 2.2 Mylan ordinary shares for each Perrigo ordinary share. The proposal was almost immediately rejected by Perrigo's board as too low, as was a later revised bid for $75 in cash and 2.3 Mylan ordinary shares per Perrigo share. More recently, however, Perrigo CEO Joseph Papa indicated that the company would be open to negotiating with Mylan provided the price was right, but he said the companies were "pretty far apart" at the moment (for related analysis, see ViewPoints: Come to Papa – Perrigo encourages another Mylan bid).

Meanwhile, Teva submitted a cash-and-stock proposal in April to buy Mylan for $82 per share, or around $40.1 billion, which was subsequently dismissed by Mylan as inadequate. Teva disclosed on May 27 that it bought a 1.35-percent stake in Mylan, a move that Mylan says breaches US antitrust laws, and the Israeli drugmaker has been steadily increasing its holding, with ownership climbing to roughly 2.8 percent as of June 10.

Earlier this month, Mylan urged Teva to "stop playing games" and either submit another formal offer or dismiss its pursuit altogether, with Coury describing "Teva's stake-building as a further indication of its intention to meddle with our business, strategy and mission."

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